How to Turn a Your Family Bank® Debt Elimination Plan Into a Business Write-Off

(Yes, Really—with an Executive Bonus Strategy)

Imagine eliminating your personal debt and lowering your business’s taxable income at the same time. Sounds too good to be true? Not when you combine the power of the Your Family Bank® (YFB) strategy with a clever little tool called an Executive Bonus Plan (EBP).

Let’s break down how business owners and self-employed professionals can fund their YFB plan with pre-tax dollars—legally and efficiently.

The YFB Strategy, in a Nutshell

Your Family Bank is a method that uses high-cash-value whole life insurance as a personal banking system. It’s designed to:

• Wipe out high-interest consumer debt.

• Recapture lost interest payments.

• Build long-term, tax-advantaged savings.

• Create a legacy (without Wall Street volatility).

At Black Hills Financial Planning, we customize this approach to fit your lifestyle—whether you’re drowning in credit card interest or just looking to build generational wealth without Uncle Sam taking a huge cut.

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The Tax Problem with Life Insurance (and the Clever Workaround)

Normally, life insurance premiums are not tax-deductible. But what if your business paid those premiums for you—as a bonus?

Enter the Executive Bonus Plan (under IRC §162), a legal and IRS-recognized way to:

• Pay for a personally owned policy
• Deduct the payment as a business expense
• Keep all the cash value and benefits yourself

Here’s the play:

1. Your business pays the life insurance premium as a bonus to you (the employee).

2. That bonus is tax-deductible to the business.

3. You report the bonus as income—but retain ownership of the policy and its growing cash value.

4. Optionally, the business can “gross up” the bonus to cover your taxes, making it a true win-win.

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Why This Pairs Perfectly with Your Family Bank

The YFB strategy thrives when funded efficiently. And with an Executive Bonus Plan, you’re not just paying premiums—you’re:

• Reducing your business’s taxable income

• Building a personal bank you control

• Using today’s dollars to eliminate tomorrow’s liabilities

That’s next-level financial planning.

What You Need to Qualify

Like any life insurance policy, there are a few hoops:

• You’ll need to complete a medical exam and urinalysis.

• The business must properly document the EBP for compliance.

• You’ll want to tailor the bonus amount to fit your debt-elimination goals.

The good news? We walk you through it all.

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Ready to Use Your Business to Crush Your Debt?

We can show you how to get out of debt in under 9 years—without spending more than you do today—and potentially write off the funding mechanism along the way.

At Black Hills Financial Planning, we specialize in personalized, tax-efficient strategies that help you:

• Pay off debt faster

• Build wealth smarter

• Keep more of what you earn

👉 Let’s talk. Schedule your free consultation at blackhillsfinancialplanning.com or call (605) 641-3776. There’s no obligation—just clarity.